â¢ This Division defines US
originating goods . Preferential rates of customs duty under
the Customs Tariff Act 1995 apply to US originating goods
that are imported into Australia.

â¢ Subdivision B provides that
goods are US originating goods if they are wholly obtained or
produced entirely in the US.

â¢ Subdivision C provides that
goods are US originating goods if they are produced entirely in the
US, or in the US and Australia, exclusively from originating
materials.

â¢ Subdivision D sets out when
goods (except clothing and textiles) that are produced entirely in
the US, or in the US and Australia, from non-originating
materials only, or from non-originating materials and
originating materials, are US originating goods.

â¢ Subdivision E sets out when
goods that are clothing or textiles that are produced entirely in
the US, or in the US and Australia, from non-originating
materials only, or from non-originating materials and
originating materials, are US originating goods.

â¢ Subdivision F sets out when
accessories, spare parts or tools (imported with other goods) are
US originating goods.

â¢ Subdivision G deals with how
the packaging materials or containers in which goods are packaged
affects whether the goods are US originating goods.

â¢ Subdivision H deals with how
the consignment of goods affects whether the goods are US
originating goods.

Agreement means the
Australia-United States Free Trade Agreement done at
Washington DC on 18 May 2004, as amended from time to
time.

Note: In 2004
the text of the Agreement was accessible on the Internet through
the web site of the Department of Foreign Affairs and Trade.

Australian originating goods
means goods that are Australian originating goods under a law of
the US that implements the Agreement.

Convention means the
International Convention on the Harmonized Commodity Description
and Coding System done at Brussels on 14 June 1983.

Note: The
text of the Convention is set out in Australian Treaty Series 1988
No. 30. In 2004 this was available in the Australian Treaties
Library of the Department of Foreign Affairs and Trade, accessible
on the Internet through that Department’s world-wide
web site.

customs value , in relation to
goods, has the meaning given by section 159.

fuel has its ordinary
meaning.

Harmonized System means the
Harmonized Commodity Description and Coding System (as in force
from time to time) that is established by or under the
Convention.

Harmonized US Tariff Schedule
means the Harmonized Tariff Schedule of the United States (as in
force from time to time).

indirect materials means:

(a) goods used in the production, testing or inspection of
other goods, but that are not physically incorporated in the other
goods; or

(b) goods used in the operation or maintenance of buildings
or equipment associated with the production of other goods;

including:

(c) fuel; and

(d) tools, dies and moulds; and

(e) lubricants, greases, compounding materials and other
similar goods; and

(f) gloves, glasses, footwear, clothing, safety equipment and
supplies for any of these things; and

(g) catalysts and solvents.

Interpretation Rules means the
General Rules for the Interpretation of the Harmonized System
provided for by the Convention.

national of the US has the
meaning given by Annex 1-A to Chapter 1 of the
Agreement.

non-originating materials
means goods that are not originating materials.

originating materials
means:

(a) goods that are used in the production of other goods and
that are US originating goods; or

(b) goods that are used in the production of other goods and
that are Australian originating goods; or

(c) indirect materials.

Example: This example
illustrates goods produced from originating materials and
non-originating materials.

Pork sausages are produced in the US from US cereals, Hungarian
frozen pork meat and Brazilian spices.

The US cereals are originating materials since they are goods used
in the production of other goods (the sausages) and they are US
originating goods under Subdivision B.

The Hungarian frozen pork meat and Brazilian spices are
non-originating materials since they are produced in
countries other than the US and Australia.

(1) Goods are US originating goods if they are
wholly obtained or produced entirely in the US.

(2) Goods are wholly obtained or produced entirely in
the US if, and only if, the goods are:

(a) minerals extracted in the US; or

(b) plants grown in the US, or in the US and Australia, or
products obtained from such plants; or

(c) live animals born and raised in the US, or in the US and
Australia, or products obtained from such animals; or

(d) goods obtained from hunting, trapping, fishing or
aquaculture conducted in the US; or

(e) fish, shellfish or other marine life taken from the sea
by ships registered or recorded in the US and flying the flag of
the US; or

(f) goods produced exclusively from goods referred to in
paragraph (e) on board factory ships registered or recorded in
the US and flying the flag of the US; or

(g) goods taken from the seabed, or beneath the seabed,
outside the territorial waters of the US by the US or a national of
the US, but only if the US has the right to exploit that part of
the seabed; or

(h) goods taken from outer space by the US or a national of
the US; or

(i) waste and scrap that:

(i) has been derived from production operations in the US;
or

(ii) has been derived from used goods that are collected in
the US and that are fit only for the recovery of raw materials;
or

(j) recovered goods derived in the US and used in the US in
the production of remanufactured goods; or

(k) goods produced entirely in the US exclusively from goods
referred to in paragraphs (a) to (i) or from their
derivatives.

â¢ This Subdivision sets out when
goods (except clothing and textiles) that are produced entirely in
the US, or in the US and Australia, from non-originating
materials only, or from non-originating materials and
originating materials, are US originating goods.

â¢ The goods may be US
originating goods under section 153YE (which applies to all
goods except clothing and textiles).

â¢ The goods may also be US
originating goods under section 153YF (which applies only to
goods that are chemicals, plastics or rubber).

(a) a tariff classification (the final
classification ) that is specified in column 2 of the
Schedule 1 tariff table applies to the goods; and

(b) they are produced entirely in the US, or entirely in the
US and Australia, from non-originating materials only or from
non-originating materials and originating materials; and

(c) if any of the following 3 requirements apply in relation
to the goods—that requirement is satisfied.

First requirement

(2) Subject to subsection (3), the first requirement
applies only if a change in tariff classification is specified in
column 3 of the Schedule 1 tariff table opposite the final
classification for the goods. The first requirement is that:

(a) each of the non-originating materials satisfies the
transformation test (see subsection (8)); or

(b) the following are satisfied:

(i) the total value of all the non-originating
materials does not exceed 10% of the customs value of the
goods;

(ii) if one or more of the non-originating materials
are prescribed for the purposes of this paragraph—each of
those non-originating materials satisfies the transformation
test (see subsection (8)).

Note 2: The
value of the non-originating materials is to be worked out in
accordance with the regulations: see subsection 153YA(2).

(3) However, the first requirement does not apply if:

(a) an alternative requirement to the change in tariff
classification is also specified in column 3 of the Schedule 1
tariff table opposite the final classification for the goods;
and

(b) that alternative requirement is satisfied.

Second requirement

(4) Subject to subsection (5), the second requirement
applies only if a regional value content requirement is specified
in column 3 of the Schedule 1 tariff table opposite the final
classification for the goods. The second requirement is that the
goods satisfy that regional value content requirement.

(5) However, the second requirement does not apply if:

(a) an alternative requirement to the regional value content
requirement is also specified in column 3 of the Schedule 1
tariff table opposite the final classification for the goods;
and

(b) that alternative requirement is satisfied.

(6) The regulations may prescribe different regional value
content requirements for different kinds of goods.

Third requirement

(7) The third requirement is that the goods satisfy any other
requirement that is specified in, or referred to in, column 3 of
the Schedule 1 tariff table opposite the final classification
for the goods.

Transformation test

(8) A non-originating material satisfies the
transformation test if:

(a) it satisfies the change in tariff classification that is
specified in column 3 of the Schedule 1 tariff table opposite
the final classification for the goods; or

(b) it does not satisfy the change in tariff classification
mentioned in paragraph (a), but it was produced entirely in
the US, or entirely in the US and Australia, from other
non-originating materials, and each of those materials
satisfies the transformation test (including by one or more
applications of this subsection).

Note 2:
Subsection (8) operates in a recursive manner: a
non-originating material may satisfy the transformation test
in its own right, or it may satisfy it because each
non-originating material used to produce it satisfies the
transformation test (whether because each of those materials does
so in its own right, or because each non-originating material
used to produce the material does so), and so on.

â¢ This Subdivision sets out when
goods that are clothing or textiles that are produced entirely in
the US, or in the US and Australia, from non-originating
materials only, or from non-originating materials and
originating materials, are US originating goods.

â¢ The goods may be US
originating goods under section 153YH (which applies to all
clothing and textiles).

â¢ The goods may also be US
originating goods under section 153YI (which applies only to
clothing and textiles classified to Chapter 62 of the
Harmonized System).

(a) a tariff classification (the final
classification ) that is specified in column 2 of the
Schedule 2 tariff table applies to the goods; and

(b) they are produced entirely in the US, or entirely in the
US and Australia, from non-originating materials only or from
non-originating materials and originating materials; and

(c) if any of the following 2 requirements apply in relation
to the goods—that requirement is satisfied.

Note:
Subsection (5) sets out a qualification for goods put up in a
set for retail sale.

First requirement

(2) The first requirement applies only if a change in tariff
classification is specified in column 3 of the Schedule 2
tariff table opposite the final classification for the goods. The
first requirement is that:

(a) subject to subsection (3), each of the
non-originating materials satisfies the transformation test
(see subsection (7)); or

(b) the following are satisfied:

(i) the total weight of all the non-originating
materials does not exceed 7% of the total weight of the goods;

(ii) if one or more of the non-originating materials
are prescribed for the purposes of this paragraph—each of
those non-originating materials satisfies the transformation
test (see subsection (7)).

(3) In relation to goods classified to Chapter 61, 62 or
63 of the Harmonized System, paragraph (2)(a) is to be applied
by applying:

(a) for goods covered by Chapter 61 of the Harmonized
System—Chapter Rule 2 for Chapter 61 that is set out in
the Schedule 2 tariff table; and

(b) for goods covered by Chapter 62 of the Harmonized
System—Chapter Rule 3 for Chapter 62 that is set out in
the Schedule 2 tariff table; and

(c) for goods covered by Chapter 63 of the Harmonized
System—Chapter Rule 1 for Chapter 63 that is set out in
the Schedule 2 tariff table.

Second requirement

(4) The second requirement is that the goods satisfy any
other requirement that is specified in, or referred to in, column 3
of the Schedule 2 tariff table opposite the final
classification for the goods.

Goods put up in a set for retail sale

(5) However, if:

(a) the goods are put up in a set for retail sale; and

(b) the goods are classified in accordance with Rule 3 of the
Interpretation Rules;

the goods are US originating
goods only if:

(c) all of the goods in the set are US originating goods
under this Division; or

(d) the total value of the goods in the set that are not US
originating goods under this Division does not exceed 10% of the
customs value of the set of goods.

Note: The
value of the goods in the set is to be worked out in accordance
with the regulations: see subsection 153YA(2).

(6) In applying paragraph (5)(c), assume the goods were
not part of a set.

Example: A skirt and a belt
are put up in a set for retail sale. The skirt and the belt have
been classified under Rule 3 of the Interpretation Rules according
to the tariff classification applicable to skirts.

The effect of subsection (6) is that the origin of the belt
must now be determined according to the tariff classification
applicable to belts.

Transformation test

(7) A non-originating material satisfies the
transformation test if:

(a) it satisfies the change in tariff classification that is
specified in column 3 of the Schedule 2 tariff table opposite
the final classification for the goods; or

(b) it does not satisfy the change in tariff classification
mentioned in paragraph (a), but it was produced entirely in
the US, or entirely in the US and Australia, from other
non-originating materials, and each of those materials
satisfies the transformation test (including by one or more
applications of this subsection).

Note 2:
Subsection (7) operates in a recursive manner: a
non-originating material may satisfy the transformation test
in its own right, or it may satisfy it because each
non-originating material used to produce it satisfies the
transformation test (whether because each of those materials does
so in its own right, or because each non-originating material
used to produce the material does so), and so on.

(a) they are produced entirely in the US, or entirely in the
US and Australia, from non-originating materials only or from
non-originating materials and originating materials; and

(b) they are goods that are classified to Chapter 62 of
the Harmonized System; and

(c) either:

(i) in any case—the goods satisfy Chapter Rule 2 for
Chapter 62 that is set out in the Schedule 2 tariff
table; or

(ii) in the case of goods that are classified to subheading
6205.20 or 6205.30 of Chapter 62 of the Harmonized
System—the goods satisfy the subheading rule for that
subheading that is set out in the Schedule 2 tariff table.

(1) If goods (the underlying goods ) are
imported into Australia with standard accessories, standard spare
parts or standard tools, then the accessories, spare parts or tools
are US originating goods if:

(a) the underlying goods are US originating goods; and

(b) the accessories, spare parts or tools are not invoiced
separately from the underlying goods; and

(c) the quantities and value of the accessories, spare parts
or tools are the usual quantities and value in relation to the
underlying goods.

(2) In working out if the underlying goods are US originating
goods, if the goods must satisfy a regional value content
requirement under Subdivision D, the regulations must require the
value of the accessories, spare parts or tools to be taken into
account for the purposes of that requirement.

Note: The
value of the accessories, spare parts or tools is to be worked out
in accordance with the regulations: see subsection 153YA(2).

(a) goods are packaged for retail sale in packaging material
or a container; and

(b) the packaging material or container is classified with
the goods in accordance with Rule 5 of the Interpretation
Rules;

then the packaging material or container is
to be disregarded for the purposes of this Division (with 1
exception).

(2) The exception is that in working out if the goods are US
originating goods, if the goods must satisfy a regional value
content requirement under Subdivision D, the regulations must
require the value of the packaging material or container to be
taken into account for the purposes of that requirement.

Note: The
value of the packaging material or container is to be worked out in
accordance with the regulations: see subsection 153YA(2).

(a) they are transported through a country or place other
than the US or Australia; and

(b) they undergo any process of production in that country or
place (other than unloading, reloading, any operation to preserve
them in good condition or any operation that is necessary for them
to be transported to Australia).

(2) This section applies despite any other provision of this
Division.

â¢ This Subdivision allows
certain officers ( verification officers ) to enter
premises, and to exercise certain powers ( AUSFTA verification
powers ) in or on the premises, for the purpose of verifying
information relating to the export, production or transportation of
textile and clothing goods that are exported to the US.

â¢ However, verification officers
may only enter premises under this Subdivision with the
occupier’s consent.

â¢ In entering premises and
exercising AUSFTA verification powers, verification officers may be
accompanied by US customs officials, but only with the
occupier’s consent.

(1) For the purposes of this Subdivision, the following are
the AUSFTA verification powers :

(a) the power to search premises;

(b) the power to take photographs (including a video
recording), or make sketches, of premises or anything at
premises;

(c) the power to inspect, examine, count, measure, weigh,
gauge, test or analyse, and take samples of, anything in or on
premises;

(d) the power to inspect any document or record in or on
premises;

(e) the power to take extracts from, or make copies of, any
document or record in or on premises;

(f) the power to take into or onto premises any equipment or
material reasonably necessary for the purpose of exercising a power
under paragraph (a), (b), (c), (d) or (e);

(g) the power to test and operate record-keeping,
accounting, computing or other operating systems of any kind that
are at premises and may be used to generate or record information
or documents of a kind that may be communicated to Customs;

(h) the powers in subsections (2) and (3).

Operation of equipment

(2) For the purposes of this Subdivision, the AUSFTA
verification powers include the power to operate equipment
at premises to see whether:

(a) the equipment; or

(b) a disk, tape or other storage device that:

(i) is at the premises; and

(ii) can be used with the equipment or is associated with
it;

contains information that is relevant to the
verification of information relating to the export, production or
transportation of textile and clothing goods that are exported to
the US.

Removing documents and disks etc.

(3) For the purposes of this Subdivision, the AUSFTA
verification powers include the following powers in
relation to information described in subsection (2) that is
found in the exercise of the power under that subsection:

(a) the power to operate equipment or other facilities at the
premises to put the information in documentary form and remove the
documents so produced;

(b) the power to operate equipment or other facilities at the
premises to transfer the information to a disk, tape or other
storage device:

(i) that is brought to the premises for the exercise of the
power; or

(ii) that is at the premises and the use of which for the
purpose has been agreed in writing by the occupier of the
premises;

and to remove the disk, tape or other storage device from the
premises.

(1) The CEO may, by writing, authorise an officer to enter
premises, and to exercise AUSFTA verification powers in or on
premises, for the purposes of this Subdivision.

Who may be authorised to be a
verification officer

(2) The CEO must not do so unless the CEO is satisfied that
the officer is suitably qualified, because of the officer’s
abilities and experience, to exercise AUSFTA verification
powers.

Form of authorisation

(3) An authorisation may apply:

(a) generally; or

(b) during a specified period; or

(c) in or on specified premises; or

(d) during a specified period in or on specified
premises.

AUSFTA verification powers to be used
only as authorised

(4) This Subdivision does not allow:

(a) an officer who is authorised to enter premises and
exercise AUSFTA verification powers during a specified period to
enter the premises or exercise the powers at a time outside that
period; or

(b) an officer who is authorised to enter specified premises
and to exercise AUSFTA verification powers in or on the premises to
enter other premises or to exercise the powers in or on the other
premises.

(1) A verification officer may enter premises, and exercise
AUSFTA verification powers in or on the premises, to the extent
that it is reasonably necessary for the purpose of verifying
information relating to the export, production or transportation of
textile and clothing goods that are exported to the US.

Occupier’s consent required

(2) However, a verification officer must not enter premises
under this section unless the occupier of the premises consents to
the officer entering the premises and exercising AUSFTA
verification powers in or on the premises.

(3) Before obtaining a consent under subsection (2), a
verification officer must give to the occupier of the premises a
written notice stating:

(a) that the officer wishes to enter the premises and
exercise AUSFTA verification powers in or on the premises; and

(b) the period during which the officer wishes to exercise
the powers; and

(c) the name of any US customs official who the officer
proposes will accompany the officer.

(4) Before obtaining a consent under subsection (2), a
verification officer must tell the occupier of the premises that
the occupier may refuse consent.

(5) An occupier of premises may express a consent to be
limited to entry to the premises, and to the exercise of AUSFTA
verification powers in or on the premises, during a particular
period unless the occupier withdraws the consent before the end of
that period.

(6) An occupier’s consent that is not so limited has
effect in relation to any entry to the premises, and to any
exercise of AUSFTA verification powers in or on the premises, until
the occupier withdraws the consent.

Verification officer must leave premises
if consent withdrawn

(7) A verification officer must leave the premises if the
occupier withdraws the consent.

Consent to be voluntary

(8) A consent of a person does not have effect for the
purposes of this section unless it is voluntary.

Consent, or withdrawal of consent, to be
in writing

(9) A consent of a person, or a withdrawal of consent by a
person, does not have effect for the purposes of this section
unless it is in writing.

Notice setting out the occupier’s
rights and obligations

(10) Before exercising AUSFTA verification powers in respect
of premises, a verification officer must give to the occupier of
the premises a written notice setting out the occupier’s
rights and obligations under this Subdivision.

Production of identity card

(11) Before a verification officer enters premises or
exercises any AUSFTA verification powers, he or she must produce
his or her identity card to the occupier.

(1) In entering premises and exercising AUSFTA verification
powers, a verification officer may be accompanied by one or more US
customs officials, but only if the officer obtains the consent of
the occupier of the premises to those officials accompanying the
officer.

(2) Before obtaining such a consent, a verification officer
must tell the occupier of the premises that the occupier may refuse
consent.

US customs officials must leave premises
if consent withdrawn

(3) The US customs officials must leave the premises if the
occupier withdraws the consent.

Consent to be voluntary

(4) A consent of a person does not have effect for the
purposes of this section unless it is voluntary.

Consent, or withdrawal of consent, to be
in writing

(5) A consent of a person, or a withdrawal of consent by a
person, does not have effect for the purposes of this section
unless it is in writing.

(1) If a verification officer is in or on premises that he or
she entered under this Subdivision, then, while the officer is
entitled to remain in or on the premises, the officer may request
the occupier to provide reasonable assistance to the officer for
the purpose of the officer’s exercise of AUSFTA verification
powers in or on the premises.

A person may operate electronic equipment at premises in order to
exercise a power under this Subdivision only if he or she believes
on reasonable grounds that the operation of the equipment can be
carried out without damage to the equipment.

(a) as a result of equipment being operated as mentioned in
section 214BAC:

(i) damage is caused to the equipment; or

(ii) the data recorded on the equipment is damaged; or

(iii) programs associated with the use of the equipment, or
with the use of the data, are damaged or corrupted; and

(b) the damage or corruption occurs because:

(i) insufficient care was exercised in selecting the person
who was to operate the equipment; or

(ii) insufficient care was exercised by the person operating
the equipment.

(2) The Commonwealth must pay the owner of the equipment, or
the user of the data or programs, such reasonable compensation for
the damage or corruption as the Commonwealth and the owner or user
agree on.

(3) However, if the owner or user and the Commonwealth fail
to agree, the owner or user may institute proceedings in the
Federal Court of Australia for such reasonable amount of
compensation as the Court determines.

(4) In determining the amount of compensation payable, regard
is to be had to whether the occupier of the premises, or the
occupier’s employees and agents, if they were available at
the time, provided any appropriate warning or guidance on the
operation of the equipment.

(5) Compensation is payable out of money appropriated by the
Parliament.

(6) For the purposes of subsection (1):

damage , in relation to data,
includes damage by erasure of data or addition of other data.